Monday, October 19, 2015

Money laundering figures prove the banks and the lawyers are still conspiring to subvert the law.

Criminal conduct at Britain’s
banks is “a threat to national security” because of the huge damage it will
cause to the economy, the head of the country’s top crime-fighting body has warned.

Keith Bristow, director
general of the National Crime Agency, said money laundering by banks and their
other well-documented criminal activities risked undermining the “reputation of
the UK” and could trigger a sharp fall in the tax revenues generated by the
City.

Regular readers of my blogs
will know that I have been making these serious allegations for a long time
now. I have said repeatedly that the banks and their learned friends in the
(il)legal profession, represent a major threat to the well-being of the common
weal. I have repeatedly identified organised criminal behaviour as representing
a leitmotif for major banks, and they are helped and supported in their
dishonest conduct and their criminal actions by their legal advisers. Well, now
the Director of the National Crime Agency agrees with me, so all those bent
bankers and crooked lawyers who take such delight in criticising my articles
and choice of commentaries, can eat their own words.

The NCA assesses that many hundreds
of billions of pounds of international criminal money is being actively laundered
through UK banks, and their subsidiaries, each year.

The scale of the laundering
of these criminal proceeds is now so huge that it is therefore a strategic
threat to the UK’s economy and reputation. The proceeds of virtually all
serious and organised crime in the UK as well as the proceeds of a significant
amount of international serious and organised crime (including corrupt
Politically Exposed Persons seeking to launder the proceeds of their corruption
and hide stolen assets in the UK) is being laundered into and through the UK,
and these figures give the lie to the protestations of the banks that they are
doing everything possible to put their discredited houses in order.

Yes, they are spending a vast
amount of money hiring staff to work in anti-money laundering and financial
crime interdiction roles, but a significant number of these new hires are
first-timers who have little or no real experience of dealing with international
criminals. And all the time, the dirty money is flooding into these banks, with
the open connivance of the lawyers who are willing to provide a wide range of
dishonest services for international clients who are willing to pay high fee
levels, as long as no awkward questions are asked.

This state of affairs carries
a very high level of risk, but sadly, it has needed a very senior police
officer to point out that the criminal conduct of the banks poses a strategic
threat to the financial interests of this country. There will be many sleek, shiny-faced
suits in any number of plush offices who will tut-tut at the temerity of a mere
policemen making a public statement of such a nature.

One group of policy-makers
who will deeply resent the words of the Director of the NCA will be George
Osborne’s advisers in H.M.Treasury. They work for a politician who is only too
happy to see vast sums of foreign money coming into London, but like all
politicians, George doesn’t want bad news or inconvenient challenges (such as
“...is this the kind of money we should be accepting...”) attaching themselves
to his enjoyment of the cash flows!

Keith Bristow has warned that
“many hundreds of billions of pounds of criminal assets” are being laundered
through British financial institutions. ‘I believe the London property market
has been skewed by laundered money. Prices are being artificially driven up by
overseas criminals who want to sequester their assets here in the UK.’, These
statements have been made as part of an important announcement of details of a
landmark information-sharing agreement with banks to tackle illegal activity.

Now, this is going to be a
very interesting development in crime fighting, and I fear that it will be
doomed to failure in exactly the same way as the money laundering interdiction
regime has failed in the UK.

Why am I so cynical about
this?

Because it will depend on the
banks playing their part in full, and telling the truth when confronted by a
challenging application, and telling the truth isn’t exactly the strong suit
for these Mafiosi..

The proposed deal will see 10
of Britain’s biggest banks ‘voluntarily’ hand the NCA details of the accounts
and financial transactions of people suspected of money laundering and other
serious offences.

HSBC, at the centre of a
storm over tax avoidance by clients of a Swiss subsidiary, is understood
to be one of those participating. The deal will end decades of secretive
practices, during which banks have traditionally refused to hand over account
details without a court order. Both the NCA and the banks expect to face
legal challenges as a result, from customers angry that details about their
financial dealings have been given to the authorities.

Among other difficulties will
be what happens when the client accounts of a major law firm become the subject
of an application. Lawyers are among the biggest money laundering facilitators,
and they hold significant sums of money on behalf of clients. What is likely to
be the outcome when the NCA makes an official demand for the accounts of a
major client of one of the ‘magic circle’ law firms?

In my view, the amount of
legal argument and process which this scenario is likely to generate, will slow
down the investigative process immeasurably.Mr Bristow insisted, however,
that the agreement was justified because the scale of money laundering in the
City was so large that it posed a threat to the economy and national security.

During an interview he said:
“We need the evidence to investigate people and bring them to justice. We have
an interest as an agency in the reputation of the UK.

“It’s a national security
risk. Hundreds of billions of criminal assets are laundered through UK
financial institutions. Given how much our economy depends on financial
services in this country, we can ill afford the reputation of those
institutions to be damaged or for those institutions to lose their licences to
operate because of criminals exploiting their services.

“We rely on the financial
services and professional services sector for much of the wealth within our
economy, so that is a significant threat to our national security.”

He is too late! Such
sentiments might have been true 30 years ago, but frankly speaking, any private
investor who puts his trust in the UK financial sector to look after his best
interests is going to be royally screwed. You don’t believe me – just ask any
of the members of SME Alliance Ltd and learn from their horror stories of the
ways in which major UK banks saw them as sacrificial lambs, to be led to the
slaughter.

Mr Bristow, rather sweetly in
my view, said the banks would benefit from the detection of criminal activity
that would otherwise put their future in jeopardy, and insisted that only those
suspected of serious criminality would be targeted.

He added: “We are not
cheerleaders for the banks, but they deserve credit for taking some risk to
help us target these people. It’s a genuine change through an information-sharing
partnership that will give us opportunities that we would otherwise not have
had.”

Don’t be too ready to praise
these crooked institutions yet Keith, wait for a couple of years and see how
well the system is working! Suspend any cheerleading for British banks until
you see some genuine change in their criminal behaviour!

The information-sharing
agreement follows a meeting last year between Home Secretary Theresa May, the
British Bankers’ Association, the Financial Conduct Authority and the NCA.

It will operate as a pilot
scheme for a year, beginning this month, and will be expanded to include
further banks if successful.

Each participating
institution has agreed to pass on account information whenever the NCA signals
that it has received a “suspicious activity” report from another institution
about a customer’s financial dealings. The aim is to ensure that a person
suspected of money laundering at one bank is not able to carry out similar
activity elsewhere undetected.

The legal powers governing
the new system are contained in section 7 of the 2013 Crime and Courts Act. It
gives the banks and other organisations the legal right to disclose otherwise
confidential information to the NCA to help it carry out its tasks. These
include fighting economic and cyber crime, trafficking of people and drugs, and
other forms of organised crime.

The NCA said it was necessary
to focus on tackling criminal activity carried out through banks because the
British banking sector was responsible for generating eight per cent of the
country’s GDP, and 12 per cent of tax receipts.

The 10 institutions taking
part include high street retail and investment banks. Their names are not being
disclosed by the NCA because of concern that their cooperation with law
enforcers could put them at a commercial disadvantage.

We are not told what will be
the outcome when a bank hands over information requested by NCA, and where the
information, upon investigation, proves that the bank concerned has been
routinely ignoring suspicious transaction activity for a long time, thus
effectively laundering the proceeds. Will this knowledge in turn trigger the
kind of investigation and prosecution it properly should?

This is another reason why I
say the banks concerned will have to be trusted to tell the truth about the
transactions being requested, and I, for one, do not trust these specific
banking institutions any further than I could spit them!

I am very grateful to Keith
Bristow for making these observations and pointing out that the volume of
criminal money passing through the banking institutions represents a major
threat to the UK economy.

His intervention means that
the politicians and the civil servants have now got to start taking the issue
seriously, and realising that the issue of the criminal handling of all this
criminal money, as well as the dishonesty of the banking institutions, has now
become an important electoral issue.

The Tory government is
deliberately and cynically dismantling a whole raft of financial regulations
demanded by their banking friends in the City. They are using the excuse that
they merely are removing red tape restrictions which they say are holding back
British business, but in reality, this exercise in de-regulation is intended to
make it easier for their light-fingered friends in the financial sector to
accept more and more criminal money which is finding a temporary home in the
City of London.

How do I know this?

Well, the Sunday Times
reported on 18th October that that well-known laundering bank which
likes to say ‘Yes’ to foreign drug money, HSBC, has decided to stay in the UK
after all, instead of decamping to Hong Kong.

“...HSBC is leaning towards
remaining in Britain after a number of victories in its battle to water down
regulatory curbs on the banking industry.

A series of recent government
U-turns, including changes to the bank levy, mean it is more likely to keep its
headquarters in London at the end of the year, according to shareholders and
senior insiders.

Chief executive Stuart
Gulliver has secured “pretty much everything he wanted out of the government”,
a high-level source said. And a top 10 shareholder said it was “more than
likely that the bank will remain in the UK when the domicile review is
completed”.

That would mark a substantial
victory for George Osborne. The chancellor has been scrambling to convince HSBC
and fellow FTSE 100 emerging markets lender Standard Chartered to retain their
headquarters in London...”

Well I don’t know much about
a victory for George Osborne, it seems to me that he has bowed down completely
and abjectly to the pathetic empty threats of Stuart Gulliver and his Ton-Ton
Macoute bully-boys!

Remember, this is the bank
which was held out to dry by the US authorities for its part in a massive
criminal money laundering case.

HSBC
Holdings Plc’s $1.9 billion agreement with the U.S. to resolve charges it
enabled Latin American drug cartels to launder billions of dollars was approved
by a federal judge.

“A pending criminal case is not window
dressing” the judge wrote, noting that the case was filed and would remain
pending for five years under the agreement. “By placing a criminal matter on
the docket of a federal court, the parties have subjected their DPA to the
legitimate exercise of the court’s authority.”

Lack of
proper controls allowed the Sinaloa drug cartel in Mexico and the Norte del
Valle cartel in Colombia to move more than $881 million through HSBC’s U.S.
unit from 2006 to 2010, the government alleged in the case. The bank also cut
resources for its anti-money-laundering programs to “cut costs and increase
profits,” the government said in court filings...”

This is the banking
institution that George Osborne wants to keep here in London, and for which he
is prepared to feather-bed the regulatory requirements. You must decide whether
this demonstrates George Osborne’s commitment to money laundering preventions!

HSBC threatened to move its
domicile out of the UK, because of the tough regulatory regime it was being
forced to operate within. As a result, Osborne has turned himself inside out to
slash the bank levy and watered down the ring-fence rules that demand that
banks segregate their retail arms from their investment side.

Now, you read it here in this
blog months ago my prediction that HSBC and its dodgy overpaid executives would
never leave the UK, because life was too easy for them here. And I was right,
and it just got easier!

As important is the fact that
the Bank of England has dropped a proposed rule to require executives at failed
banks to prove they did all they could to prevent a collapse.

In one move, they have
rendered the regime which would have helped to ensure the imprisonment of executives of failed banking
institutions, null and void. In future reckless bankers whose institutions
fail, like Fred the Shred at HSBC will no longer face the possibility of
imprisonment for their criminal recklessness. Once again, the protected species
are off the hook.

The Sunday Times reports that
the final decision is still awaited, and that Gulliver still hopes to squeeze
more concessions out of H.M.Treasury. Well, nothing would surprise me, so watch
this space.

Looks like the money
laundering possibilities just got better for British bankers. Dig in boys, fill
your boots, just remember to remit George his share, but remember, just because
it is paid through the tax-man, doesn’t make it any more legitimate. These
monies are still the proceeds of crime!

About Me

Having spent my career dealing with financial crime, both as a Met detective and as a legal consultant, I now spend my time working with financial institutions advising them on the best way to provide compliance with the plethora of conflicting regulations and laws designed to prevent and forestall money laundering - whatever that might be! This blog aims to provide a venue for discussion on these and aligned issues, because most of these subjects are so surrounded by disinformation and downright intellectual dishonesty, an alternative mouthpiece is predicated. Please share your views with what is published here from time to time!